Mamma to Acquire Copernic

Montreal-based search marketing player Mamma.com has announced plans to acquire desktop search developer Copernic Technologies for an undisclosed cash and stock offer.

The transaction is expected to close in the first quarter of 2005. It will need to be approved by the directors of Mamma.com, as well as the shareholders of privately-held Copernic. Mamma.com has retained San Francisco-based investment bank Merriman Curhan Ford & Co. as an advisor in the pending acquisition.

Copernic has offered its Copernic Agent desktop Web meta-search application for the past eight years, and launched Copernic Desktop Search (CDS) in September. The move placed Copernic in the desktop search arena against Google, Microsoft, and a number of smaller players.

Desktop search — and especially desktop search that integrates Web search — has become a hot space in recent months. Google unveiled its desktop search in November, and Microsoft recently showed off its own progress in the area during an analyst’s day at its headquarters. Smaller player Blinkx was among the first to make a mark in desktop search back in July.

According to Guy Faure, president and CEO of Mamma.com, the acquisition will give added value to Mamma.com and Copernic users and expose Mamma.com’s advertisers to a broader demographic. More than 30 million users have downloaded Copernic Agent.

Desktop search — and especially desktop search that integrates Web search — has become a hot space in recent months. Google unveiled its desktop search in November, and Microsoft recently showed off its efforts at an analyst’s day at its headquarters. Smaller players like Blinkx are also working to make a mark in this area.

Despite all this attention, the desktop search lacks a clear revenue model on its own, according to Niki Scevak, an analyst with Jupiter Research. “When you look at how money is made in search, one-third of total queries conducted on a search engine generate the paid search revenue. Those are searches with commercial intent,” he said. “If you look at the intent of a desktop searcher, there’s not a lot of commercial intent there.”

It does have value as a part of a larger offering, and can play a role in creating consumer loyalty to a particular search engine, he said. “The role of desktop search is not so much to increase the number of commercial searches as it is to ensure that a user’s commercial searches are done on that particular search engine.”